Former US Secretary of Treasury Jack Lew speaks during a discussion on “Reforming the Euro Area: Views from Inside and Outside of Europe,” during the 2018 Spring Meetings of the International Monetary Fund and World Bank Group at IMF Headquarters in Washington, DC, April 19, 2018.
Saul Loeb | AFP | Getty Images
Social Security will run out of enough income to fully pay benefits during the next presidency, former Treasury Secretary Jack Lew said during an interview on CNBC’s “The Exchange” on Thursday.
While Congress may not be eager to handle the program’s issues now, “it can’t be too many years off,” said Lew, a professor at Columbia University’s School of International and Public Affairs.
“I would certainly caution anyone running for president the next time or running for the Senate to keep their options open,” Lew said.
Social Security provides monthly benefits to more than 75 million Americans, including people who are retired or disabled, as well as their families, according to July data from the agency.
Yet the program faces a looming funding shortfall that may prompt benefit cuts. The trust fund the program relies on to help pay retirement benefits may run out in the fourth quarter of 2032, when 78% of benefits would be payable, Social Security’s trustees projected in an annual report released in June. If combined with the disability trust fund, the program would be able to pay full benefits until the third quarter of 2034, when 83% of scheduled benefits would be payable, according to the trustees’ projections.
To be sure, because payroll taxes toward the program would continue to come in, the program would not lose its ability to pay benefits entirely.
As a record number of Americans reach retirement age, demand for Social Security benefits is high.
Outlays for Social Security, Medicare and Medicaid payments increased by 7%, or $198 billion, in the first 11 months of fiscal year 2026, according to the Bipartisan Policy Center. Average Social Security benefits and the number of beneficiaries increased, while Medicare enrollment increased and saw higher payment rates per service and Medicaid costs per enrollee rose.
Outlays for the first 11 months of fiscal year 2026 were up 4%, or $235 billion, compared to the same period in fiscal year 2025, according to the Bipartisan Policy Center. As of the end of August, the cumulative deficit for fiscal year 2026 was $2 trillion, according to the Washington, D.C., think tank.
Lawmakers should start thinking and talking about Social Security reform, Lew said during his CNBC appearance.
“There are solutions, but the solutions get harder and harder as you get closer to the exhaustion date,” Lew said. “It’s not too soon to start thinking and talking about it.”
Lawmakers may draw on the bipartisan approach taken in 1983, when President Ronald Reagan signed the last set of major reforms to the program into law, Lew said. Those changes included taxes on benefits and raising the retirement age.
While some lawmakers have proposed investing in stocks to help shore up Social Security’s shortfall, Lew said he’s “not a big fan of the U.S. government owning private businesses.” He said there’s no guarantee that investing in the market will work over any particular time frame.
However, lawmakers may consider the size of the wage base and whether the tax that’s coming in will be enough to pay the bills, Lew said. In 2026, wages up to $184,500 are subject to Social Security payroll taxes.
“There’s going to have to be some process. There’s going to have to be an openness to ideas,” Lew said.
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